March 7 (Bloomberg) -- The Los Angeles County Museum of Art
and the city’s struggling Museum of Contemporary Art are
exploring merger plans, quelling speculation that Eli Broad
would step in and take over MOCA.

The museums’ merger arose when MOCA approached Lacma
recently with the idea. Lacma then drew up a proposal outlined
in a letter sent to MOCA last month by Lacma’s chief executive
officer, Michael Govan, and his board’s two co-chairmen,
according to the Los Angeles Times, which first reported the
news.

“Combining Lacma and MOCA would strengthen both,” Govan
said in a statement. “Lacma’s strong leadership, its history of
fundraising, and its support from Los Angeles County and other
donors will provide MOCA with the stability it deserves.”

Lacma declined to provide details of the proposal,
according to Miranda Carroll, its director of communications,
who said only that MOCA would keep its name and facilities.

MOCA’s financial troubles and board turmoil last year
prompted talk of a Broad takeover. A co-founder of MOCA, Broad
had pledged to give it $30 million when its endowment declined
in 2008. He is building a contemporary-art museum that will
feature his personal collection just two blocks from MOCA’s
flagship downtown location. Known as The Broad, it is due to
open in 2014.

Board Turmoil

MOCA was pummeled last year by financial, curatorial and
institutional woes. At least seven board members quit, including
artists Ed Ruscha and John Baldessari. Some current and former
directors challenged Broad’s influence over the museum.

Resigning trustees were critical of the museum under
Jeffrey Deitch, a former New York gallery owner now serving as
director, and supported Paul Schimmel, the longtime chief
curator who resigned on June 29.

Broad had been holding back some of his pledged
contributions and then agreed in August to become current on
those payments, Denne said at the time.

The museum had enjoyed a turnaround in 2008 with Broad’s
pledge of financial support, but that recovery appeared to stall
under Deitch, although attendance doubled to more than 400,000
last year.

Falling Funds

While MOCA added wealthy art collectors to the board --
including Peter Brant, Steven Cohen, Victor Pinchuk and Laurence
Graff -- contributions and grants to the museum fell 21.5
percent to $14.6 million in the fiscal year that ended June 30,
2011, the most recent full year for which data are available.

The museum’s operating profits have declined and matching
funds have gone unmatched while expenses rose 10.7 percent to
$17.5 million in the period.

In September, MOCA, rocked by the departures of board
members, postponed its annual gala, which usually happens in
November and has been the museum’s largest annual fundraiser,
tax filings show.

The 2011 gala, which raised $2.5 million, was directed by
performance artist Marina Abramovic and featured live nude
models rotating on tables, while guests including Pamela
Anderson, Kirsten Dunst and Will Ferrell dined in white lab
coats.